Candlestick charts are one of the most popular types of day trading chart. They include all of the standard trading information, and they are relatively easy to read and interpret. Japanese candlestick charts can be used to further the investor's understanding of dozens of frequently recurring market scenarios. Combining candlestick charting techniques with traditional technical approaches creates a powerful formula for the savvy investor.

Candlestick charts include several pieces of trading information, including the following:

Candlesticks contain the same data as a normal bar chart but highlight the relationship between opening and closing prices. The narrow stick represents the range of prices traded during the period (high to low) while the broad mid-section represents the opening and closing prices for the period.

If the close is higher than the open - the candlestick mid-section is hollow or shaded blue/green.
If the open is higher than the close - the candlestick mid-section is filled in or shaded red.

The advantage of candlestick charts is the ability to highlight trend weakness and reversal signals that may not be apparent on a normal bar chart.